Weekly Roundup 68: A Curated Linkfest For The Smartest People On The Web

I spend 8 hours every Sunday putting this together…If you like this roundup kindly include a reference to SimoleonSense.com .Thanks!

Weekly Cartoon

Joke of Week

Q: How many central bank economists does it take to screw in a light bulb?
A: Just one — he holds the light bulb and the whole earth revolves around him.

Most Important Articles Of The Week !!

Happy people have the gift of gab- via MSNBC- Happy people tend to talk more than unhappy people, and when they do, it tends to be less small talk and more substance, a new study finds.A group of psychologists from the University of Arizona and Washington University in St. Louis set out to find whether happy and unhappy people differ in the types of conversations they tend to have.

Sheena Iyengar’s The Art of Choosing & Deciding – Via Situationist – The power of choice: Understanding the motivations, biases, and cultural influences that determine the choices, large and small, we make in our lives.” As interesting as those issues are, the interview itself is at its best when Sheena discusses her own remarkable situation and how that influenced her research.

Complexity is the handmaiden of deception- via Naked Capitalism – After Elizabeth Warren had her chance to speak, the thought on my mind was ‘complexity is the handmaiden of deception.’ That wasn’t the only point of her presentation on consumer protection, but that was the takeaway for me. Her point was simply that contracts are the bedrock of the U.S. legal system in promoting law and order. The purpose of contracts is to support the ‘invisible hand’ by allowing both sides of the contract to walk away happy.

What is neuroeconomics? – via QN – This new field looks at how economic decision-making actually happens inside the brain. Jonathan Cohen, co-director of the Princeton Neuroscience Institute at Princeton University, describes insight that are emerging from the collaborative work of neuroscientists, psychologists, and economists.

Some CEOs Are Selling Their Companies Short- via Finance Professor – “‘There is no question these transactions should be a red flag for investors,’ says Carr Bettis, the co-founder of forensic accounting firm Gradient Analytics and co-author of a recent study on hedging. ‘The evidence is pretty compelling that hedges tend to be used before bad news hits the market.’ Bettis’ research found that in the year after executives and directors had engaged in hedging, their company’s stock often dropped markedly. He also found evidence of an increase in financial restatements and shareholder lawsuits during the same period. Executives at MCI, Enron, ImClone (IMCL), Krispy Kreme—companies that suffered some of the great stock melt-downs of the last decade—hedged their shares.”

Billionaire Alert! -The Other Ron Burkle - via Investors Consigliere & Business Week – The billionaire has been belittled for his celebrity friends and bitter lawsuits. But his moves on Barnes & Noble and Barneys are no laughing matter

A New Age of Monopolies- via WSJ – ‘If monopoly persists, monopoly will always sit at the helm of the government,” Woodrow Wilson once wrote. “If there are men in this country big enough to own the government of the United States, they are going to own it.”

Miguel’s Weekly Favorites

Fantastic Presentation! The Age of Impossible Numbers-Via Seed Magazine – The human brain is poorly equipped for comprehending massive quantities. This makes sense from an evolutionary perspective; large numbers are relatively new features of our mental landscapes. Thousands, millions, billions, and recently trillions—once reserved for describing cosmic distances of faraway galaxies—have been brought down to Earth in terms of the national deficits we accrue, the bytes of information we clock, and critically, the stuff we consume. But how to wrap one’s head around such unfathomable figures in a meaningful way? In Running the Numbers, photographer Chris Jordan attempts to convey the vastness of modern consumption by breaking down annual statistics into more graspable quantities depicted by clever visualizations made of individual objects or groups of objects that he photographs. The 106,000 aluminum cans consumed in the US every 30 seconds, for instance, become the individual dots of Seurat’s Sunday Afternoon on the Island of La Grande Jatte. “There’s a disconnect that happens when we assume we know what we’re talking about when we talk about hundreds of millions of plastic bottles,” Jordan says. “I’m trying to translate these numbers from the deadening language of statistics into a visual language that allows some kind of comprehension.”

Behavioral Economics and The Bachelor: Why Jake is a perfect example of predictable irrationality- via Brooks Bell – Besides being written in a conversational and engaging style, the facts within are fascinating. Who knew that we were so easily and willingly manipulated as a society of consumers? Since finishing the book, I’ve been noticing examples everywhere of the content covered. Decision paralysis in the grocery store. The Achilles’ heel of arousal. And so on. But one popular television show really demonstrates some of the principles that Ariely covers. And those principles are dramatically and glaringly obvious—in high definition.

Wisdom is a tree- via DFA – Wisdom is a tree. The attributes of wisdom are its fruit. As man knows the attributes of wisdom man tries to teach these attributes. It is very difficult and frustrating to cultivate these attributes because it is the same as trying to produce bananas without the banana tree. Cultivate the tree and the bananas will emerge automatically.One must be fully trained to play the game of life to the best of one’s fully developed potential. While the world is focused on researching and refining ways of how to develop one’s regular intelligence potential one’s other equally important emotional intelligence potential is more or less neglected. And as result most people live their lives struggling with a partially developed emotional intelligence potential. By the time experience grinds down this gap in potential they are ready to retire having missed out on playing the game of life as it is supposed to be played in full prime of life.

Neuromarketing the Neurology of Facebook - via Neurocritic – First, we had the fictitious Neurology of Twitter study, sponsored by The Neurocritic. Now it appears there’s been an actual (unpublished) fMRI study of viewing Facebook pages, conducted by Netway, a neuromarketing firm.Is it okay to ignore results from people you don’t trust? – via Bad Science – If the media were actuarial about drawing our attention to the causes of avoidable death, your newspapers would be filled with diarrhoea, Aids, and cigarettes every day. In reality we know this is an absurd idea. For those interested in the scale of our fascination with rarity, one piece of research looked at a 3 month period in 2002 and found that 8,571 people had to die from smoking to generate one story on the subject from the BBC, while there were 3 stories for every death from vCJD.

Cultural Cognition of Scientific Consensus - via SSRN – Why do members of the public disagree – sharply and persistently – about facts on which expert scientists largely agree? We designed a study to test a distinctive explanation: the cultural cognition of scientific consensus. The “cultural cognition of risk” refers to the tendency of individuals to form risk perceptions that are congenial to their values. The study presents both correlational and experimental evidence confirming that cultural cognition shapes individuals’ beliefs about the existence of scientific consensus, and the process by which they form such beliefs, relating to climate change, the disposal of nuclear wastes, and the effect of permitting concealed possession of handguns. The implications of this dynamic for science communication and public policy-making are discussed.

Mark Twain on Risk- via Street Capitalist – Most people fixate on interesting accidents over frequent accidents. This often causes sensationalist reporting and people start to fear a shark attack over crashing into a deer, even though the latter is 300 times more likely to occur.The Cold Hard Facts of Cold Reading - via Point of Inquiry – Ian Rowland is a Mentalist and Mind Reader living near London, UK. The world’s foremost authority on cold reading, he is the author of the Full Facts Book of Cold Reading. In this book, Rowland has defined and categorized the different types of psychic readings, and created a taxonomy of cold reading techniques. Rowland was the first person to lecture on cold reading to the Magic Circle and his book has been described as “the definitive work” on the subject by Derren Brown, James Randi, Martin Gardner, Teller, and Banachek.

Do Green Products Make Us Better People?- via Sagepub – Consumer choices reflect not only price and quality preferences but also social and moral values, as witnessed in the remarkable growth of the global market for organic and environmentally friendly products. Building on recent research on behavioral
priming and moral regulation, we found that mere exposure to green products and the purchase of such products lead to markedly different behavioral consequences. In line with the halo associated with green consumerism, results showed that people act more altruistically after mere exposure to green products than after mere exposure to conventional products. However, people act less altruistically and are more likely to cheat and steal after purchasing green products than after purchasing conventional products. Together, our studies show that consumption is connected to social and ethical behaviors more broadly across domains than previously thought.

Will Airlines and Passengers Call a Truce?- via NYT – When weather forecasters predicted severe winter storms across the country in the last few weeks, airlines sent their customers a steady stream of e-mail and text messages, giving them a chance to change their itineraries ahead of the bad weather.

Finance: Where The Law Of One Price Doesn’t Apply - via PsyFi – Even the smartest amongst us can be fooled by the pricing structures of relatively simple financial products. In any normal industry we would expect the law of one price would be prominent – in efficient markets all identical goods must have only one price.

The Top Ten Ways to Crack Down on Corporate Financial Crime - via Counterpunch – Ninety-five percent of criminologists study blue collar crime. Five percent study white collar crime. Of the tiny minority who study white collar crime, ninety five percent focus on the individuals who rip off the corporation. We are left with a small handful of criminologists – think Edwin Sutherland, John Braithwaite, Gil Geis – who have studied or are studying – corporate crime.

New York Isn’t Silicon Valley. That’s Why They Like It. – via NYT – “Just a year ago, it was less than half that,” he said in an e-mail message. “New York has become a hotbed of innovation,” he said. “Many start-ups there have as much promise as the best start-ups here in Silicon Valley. And the ecosystem of entrepreneurs, engineers, investors and other players is growing at a pace similar to Silicon Valley when it first got started.”

Stiglitz, Nobel Prize-Winning Economist, Says Federal Reserve System ‘Corrupt’ - via Huffington Post – One of the world’s leading economists said Wednesday that the very structure of the Federal Reserve system is so fraught with conflicts that it’s “corrupt.” Nobel laureate Joseph Stiglitz, a former chief economist at the World Bank, said that if a country had applied for World Bank aid during his tenure, with a financial regulatory system similar to the Federal Reserve’s — in which regional Feds are partly governed by the very banks they’re supposed to police — it would have raised alarms.

The Fully Disclosed Fraud- via False Profits Blog – Until recent years, to “prove” that an endless chain income or sales scheme was a fraud only required explaining that it was in fact an endless chain. In other words, endless chain schemes were understood to be “inherent” frauds. They are not good businesses gone bad or good people doing wrong. They are, by definition, frauds, custom-designed scams that must deceive and will always cheat the majority who join them. The fraud of endless chains may be reduced to a simple fact: They make a false promise, much like a “bait and switch” proposition does. That false promise is that everyone, always, has the opportunity to make unlimited money from an ever-expanding base of new investors.

The Corporate Pyramid Fable - via Harvard Law – Our results indicate matters worked out much differently. Although politicians may have supported the intercorporate dividends tax because they believed that it would induce corporations to unwind stakes held in other publicly traded corporations, tax reform apparently did not have that effect. Corporations that owned large stakes in publicly traded firms rarely sought to exit in the years immediately following the introduction of intercorporate taxation of dividends, and many corporations even increased their ownership stakes in other corporations. A key reason the introduction of intercorporate taxation of dividends did not have the anticipated impact was that the tax burden was so modest. Although dividends by one corporation to another corporation were no longer completely tax-free, they remained largely exempt.

Videos & Media

1. Videos from The Encultured Brain– Via NeuroAnthro- It gives me great pleasure to announce that you can apparently now access streaming .wmv files of the four long-format talks that were given at The Encultured Brain Conference at the University of Notre Dame in October 2009. No, you do not have to rush out to your video store, nor do you need to send me a stamped self-addressed envelope as well as a surprisingly large fee for ‘postage and handling.’ Yes, it has taken a while, so file this in the ‘much better late than never’ box, and enjoy.

Academic Papers

An effort based analysis of the paradoxical effects of incentives on decision-aided performance - via JBDM – This study examines the effect of incentives on decision-aided performance. In particular, the study provides further insight into whether, when, and how incentives affect task performance in the presence of decision aids by (1) replicating previous research showing the negative effects of incentives on performance; (2) investigating whether this effect generalizes to a more realistic scenario in which decision makers have access to additional contextual information not captured by the decision aid; and (3) applying an effort-based framework to explain the link between incentives and performance. In contrast to the findings of prior research, our study shows that incentives do not necessarily decrease performance in the presence of decision aids. Rather, we demonstrate that the effect of incentives on decision-aided performance depends on other contextual factors such as the absence or presence of additional contextual information. By further specifying the conditions under which incentives result in increases or decreases to decision-aided task performance, our results have implications for both future research and the design of incentive systems in practice.

You’re Having Fun When Time Flies – The Hedonic Consequences of Subjective Time Progression - via Psychological Science – Seven studies tested the hypothesis that people use subjective time progression in hedonic evaluation. When people believe that time has passed unexpectedly quickly, they rate tasks as more engaging, noises as less irritating, and songs as more enjoyable. We propose that felt time distortion operates as a metacognitive cue that people implicitly attribute to their enjoyment of an experience (i.e., time flew, so the experience must have been fun). Consistent with this attribution account, the effects of felt time distortion on enjoyment ratings were moderated by the need for attribution, the strength of the “time flies” naive theory, and the presence of an alternative attribution. These findings suggest a previously unexplored process through which subjective time progression can influence the hedonic evaluation of experiences.

Goal Management in Sequential Choices: Consumer Choices for Others Are More Indulgent than Personal Choices – via Chicago – What are the differences in exerting self‐control in sequential choices when consumers choose for others (family or friends) rather than for themselves? Sequential choices represent an opportunity to manage the pursuit of one’s multiple personal goals. Consumers typically manage these personal goals by combining indulgent and virtuous choices. When choosing for others, however, this is not the case. Consumers then focus on a pleasure‐seeking goal, which leads to indulgent choices for others. Six experiments demonstrate this phenomenon and uncover conditions that encourage more virtuous choices for others.

I’m No Longer Torn After Choice : How Explicit Choices Implicitly Shape Preferences of Odors – via Psych Science – Several studies have shown that preferences can be strongly modulated by cognitive processes such as decision making and choices. However, it is still unclear whether choices can influence preferences of sensory stimuli implicitly. This question was addressed here by asking participants to evaluate odors, to choose their preferred odors within pairs, to reevaluate the odors, and to perform an unexpected memory test. Results revealed, for the first time in the study of olfaction, the existence of postchoice preference changes, in the sense of an overvaluation of chosen odors and a devaluation of rejected ones, even when
choices were forgotten. These results suggest that chemosensory preferences can be modulated by explicit choices and that such modulation might rely on implicit mechanisms. This finding rules out any explanation of postchoice preference changes in terms of experimental demand and strongly challenges the classical cognitive-dissonance-reduction account of such preference changes.THE ROLE OF MOBILE PHONES IN SUSTAINABLE RURAL POVERTY REDUCTION - via ICT – Many developing country governments and developing agencies are focusing on extending telecommunications services into rural areas, as they seek to alleviate poverty, encourage economic and social growth, and overcome a perceived ‘digital divide’. However, relatively little is known about how rural communities benefit from modern telecommunications services and what impact it is having on their lives and livelihoods. This paper endeavors to redress the balance, by examining the role of mobile telephones in sustainable poverty reduction among the rural poor.

Other Very Interesting Articles

Alcohol as a social lubricant – Alcohol is an important part of life in many cultures throughout the world, but there are many misperceptions about this common social lubricant.Obamacare worth the price to Democrats - via OC Register – So there was President Obama, giving his bazillionth speech on health care, droning yet again that “now is the hour when we must seize the moment,” the same moment he’s been seizing every day of the week for the past year, only this time his genius photo-op guys thought it would look good to have him surrounded by men in white coats.

Algebra in Wonderland - via NYT – SINCE “Alice’s Adventures in Wonderland” was published, in 1865, scholars have noted how its characters are based on real people in the life of its author, Charles Dodgson, who wrote under the name Lewis Carroll. Alice is Alice Pleasance Liddell, the daughter of an Oxford dean; the Lory and Eaglet are Alice’s sisters Lorina and Edith; Dodgson himself, a stutterer, is the Dodo (“Do-Do-Dodgson”).

Brain Science vs. Criminal Law- via NYT – Advances in neuroscience put it increasingly in conflict with criminal law: If all our mental states can ultimately be reduced to neurophysiological conditions, and there is really no such thing as free will, how can people be held accountable for crimes?Fake Drugs: Causes, Consequences, and Possible Solutions - via Policy Pointers – A US speech addressing the problem of substandard and counterfeit drugs